Presstek Announces Deep Cuts to Regain Profitability
GREENWICH, CT—Presstek Inc., a supplier of digital offset printing solutions to the printing and communications industries, announced $11.2 million in annualized profit improvement actions and expects to return to positive adjusted EBITDA in the first quarter of 2012. The company, which posted a net loss of $5.4 million in the third quarter, will greatly reduce its workforce as part of its goal of regaining profitability.
Presstek announced that a major profit improvement initiative, launched in the third quarter of 2011, is expected to provide $11.2 million in 2012 savings. Although second half 2011 earnings will see some improvement from these actions, the majority of the benefits will be realized beginning in the first quarter of 2012.
“We started taking major cost reduction actions during the third quarter of this year to right-size our business to current economic conditions, and this work has continued into the fourth quarter,” said Presstek Chairman, President and CEO Jeff Jacobson. “Our goal is to return Presstek to positive adjusted EBITDA beginning in the first quarter of 2012. In total, we expect to reduce our annualized expenses by $11.2 million.
“The vast majority of these actions will be completed by year-end 2011, and are expected to provide the company with significantly improved fiscal performance in 2012. While we are making significant cuts in spending in order to put the company on more stable footing going forward, we are not sacrificing our strategic focus on growing our CtP plate and DI portfolio offerings in larger commercial, in-plant, packaging and digital printing operations.”
In a conference call, Jacobson told The New Hampshire Business Review that most of the cuts would be gotten through "head-count reductions and realignment of responsibility to right-size our business," though he did not specify the total.
"Obviously, we will have to cut very deeply," Jacobson told the paper.
The Business Review noted that the targeted $11.2 million is about a quarter of Presstek's annual operational expenses. Presstek employs 450 in the United States and United Kingdom.